Ares Management Announces Pricing of Offering of Class A common stock

Rhea-AI Summary

Ares Management Corporation (NYSE: ARES) has priced its public offering of 9.5 million shares of Class A common stock at $54.00 per share, with an option for underwriters to purchase an additional 1.425 million shares. The offering is set to close around April 8, 2021. Concurrently, Ares entered a share purchase agreement with Sumitomo Mitsui Banking Corporation for $250 million of common stock. Proceeds will be used for the acquisition of Landmark Partners LLC and general corporate purposes, including debt repayment and growth initiatives.

Positive

• Public offering of 9.5 million shares priced at $54.00 per share.
• Concurrent share purchase agreement with Sumitomo Mitsui Banking Corporation for $250 million.
• Proceeds allocated to acquisition of Landmark Partners LLC and debt repayment.

Negative

• Issuance of new shares may dilute existing shareholders' equity.

Ares Management Corporation (NYSE: ARES) (“Ares” or the “Company”) today announced the pricing of its previously announced underwritten public offering of 9,500,000 shares of Class A common stock, par value $0.01 per share (“Class A common stock”), of the Company at a public offering price of $54.00 per share of Class A common stock. Ares has granted to the underwriters of the offering an option to purchase up to 1,425,000 additional shares of Class A common stock. The offering is expected to close on or about April 8, 2021, subject to customary closing conditions.

Concurrently with the offering, Ares entered into a share purchase agreement with Sumitomo Mitsui Banking Corporation (“SMBC”), an existing stockholder, whereby SMBC will acquire, subject to the terms and conditions of such share purchase agreement, approximately $250 million of the Company’s common stock (consisting of a number of shares of non-voting common stock and a number of shares of Class A common stock to be determined by SMBC) at a price per share equal to the public offering price less underwriting discounts and commissions. Ares intends to use the net proceeds from the offering and the concurrent private placement for (i) the payment of the cash consideration due in respect of the Company’s previously announced acquisition of Landmark Partners LLC and its subsidiaries (the “Landmark Acquisition”) and related fees, costs and expenses and (ii) general corporate purposes, including repayment of debt or preferred stock, other strategic acquisitions and growth initiatives.

In connection with the offering, Ares and its directors and executive officers have each agreed to enter into a customary lock-up agreement with the joint bookrunning managers for the offering. Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and SMBC Nikko Securities America, Inc. are acting as the lead joint bookrunning managers for the offering. BofA Securities, Wells Fargo Securities, J.P. Morgan and Goldman Sachs & Co. LLC are also serving as joint bookrunning managers for the offering. MUFG, Citigroup, BTIG, BNY Mellon Capital Markets, LLC and Deutsche Bank Securities are acting as co-managers for the offering.

A registration statement on Form S-3 relating to these securities has been filed with the Securities and Exchange Commission and has become effective. The offering may be made only by means of a prospectus supplement and accompanying prospectus. A copy of the final prospectus supplement and accompanying prospectus related to the offering can be obtained, when available, for free by visiting the Securities and Exchange Commission’s website at http://www.sec.gov or by contacting: (a) Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, (b) RBC Capital Markets, LLC, Attention: Equity Capital Markets, 200 Vesey Street, New York, NY 10281, by telephone at 877-822-4089 or by email at equityprospectus@rbccm.com, or (c) SMBC Nikko Securities America, Inc. by email at prospectus@smbcnikko-si.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor does it constitute an offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale is unlawful. Nothing in this press release constitutes an offer to sell or solicitation of an offer to buy any securities of Ares or an investment fund managed by Ares or its affiliates.

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Estate and Strategic Initiatives. Ares Management’s investment groups collaborate to deliver innovative investment solutions and consistent, attractive investment returns for fund investors throughout market cycles. As of December 31, 2020, Ares Management's global platform had approximately $197 billion of assets under management with more than 1,450 employees operating across North America, Europe, Asia Pacific and the Middle East.

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the ability of Ares to consummate the Landmark Acquisition and to effectively integrate the acquired business into our operations and to achieve the expected benefits therefrom. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Ares Management Corporation undertakes no duty to update any forward-looking statements made herein.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210406005701/en/

FAQ

What is the pricing for Ares Management's recent stock offering?

Ares Management has priced its public offering at $54.00 per share for 9.5 million shares.

When is the closing date for Ares Management's stock offering?

The offering is expected to close on or about April 8, 2021.

What will Ares Management do with the proceeds from the stock offering?

The proceeds will be used for the acquisition of Landmark Partners LLC and general corporate purposes.

How much capital will Ares Management raise from Sumitomo Mitsui Banking Corporation?

Ares will raise approximately $250 million from Sumitomo Mitsui Banking Corporation through a share purchase agreement.

Is there a risk of shareholder dilution with Ares Management's stock offering?

Yes, the issuance of new shares in the offering may dilute existing shareholders' equity.